Since education makes a person more likely to leave your region, how do you justify your investment in human capital?

Thursday, September 16, 2010

Right-Sizing Regional Cooperation

Fragmented municipalities are a common problem in the Rust Belt. We won't solve the Asian carp crisis without the involvement of a dozen or more states. Given the initiative, what is the right scale for policy?

Ever since I read Richard Longworth's "Caught in the Middle", I've grappled with the proper geographic scope for managing the challenges of economic globalization. A reminder about the suggested policy geography:

Longworth argues that the individual Midwestern states, locked within borders drawn more than 200 years ago, are too small, parochial and incompetent to compete in a globalized world. Each Midwestern state faces the same problems, but each is dealing with them on its own – and failing. Midwestern thinking is dominated by state schools and Midwestern politics is dominated by state governments. Instead, the Midwest needs a regional approach – new alliances across states lines between cities, businesses, workers and universities to set a regional agenda and reach regional solutions to the economic and political challenges of this new era.

I thought Longworth was spot on with his analysis. Now, I would respectfully disagree. The debate in Iowa:

Economic development leader Joe Raso was reminded of the importance of having a regional vision for the Iowa City-Cedar Rapids Corridor by a church flier left at his front door.

... In a global economy, he said, Midwest businesses are not just competing with each other but with players like China, Russia and India and their 3 billion workers that have jumped into the international marketplace in the past two decades.

Longworth said it's time to end "mindless competition" between neighboring towns and states, and those divided by other artificial boundaries. Regional companies and entities must work together to make education a priority to produce skilled leaders and workers, stem the brain drain to the coasts and foster innovators and entrepreneurs.

There is a mismatch of scale throughout the passage. To offer an easy-to-grasp abstraction, metros are competing with other metros throughout the world. Economic development varies widely in China, Russia and India. There is great disparity between Northern England and prosperous London. In the Midwest, there is Chicago and the rest of the megaregion. Within Iowa, there is urban and rural. There are regional divisions that matter in terms of culture, politics and economics.

Globalization has most people thinking in bigger areas of cooperation (e.g. multilateral trade agreements). A less discussed result is the rise in efficacy of subnational regions. In America, states have become increasingly burdensome. The political geography is incoherent given the economic climate. A megaregion of more states will only exacerbate this handicap. As Brookings offers, we should be thinking in terms of metros. This is the subnational geographic unit of choice. We are a country of urban tribes.

In that regard, economic corridors such as Iowa City-Cedar Rapids make a world of sense. Forget Iowa, the Midwest, and the United States. How can Iowa City-Cedar Rapids better compete? The corridor includes urban and rural, it may even cross state borders. The fate of the rest of the Rust Belt doesn't have to weigh down Iowa City-Cedar Rapids. The corridor needn't wait for other Midwestern states to get their act together (they never will).